Rambus (NASDAQ:RMBS) reported record second-quarter fiscal 2026 revenue and non-GAAP earnings, supported by growth in its memory-interface chip business and contributions from royalties and silicon IP. The company’s revenue surpassed $200 million for the first time, while management said demand trends tied to AI infrastructure, CPU-based servers and rising memory requirements continue to support its outlook.
Second-quarter revenue totaled $207.4 million, up 20% from a year earlier and 15% sequentially. Non-GAAP net income was $84.4 million, or $0.77 per diluted share, representing year-over-year growth of 24% and sequential growth of 21%.
Product Revenue Reaches Record
Product revenue was $99.2 million, rising 22% year over year and 13% from the prior quarter. Royalties revenue was $84.2 million, while contract and other revenue was $24 million, consisting primarily of silicon IP. Rambus noted that some silicon IP revenue is included in royalties revenue rather than contract and other revenue.
Seraphin attributed product growth to Rambus’ DDR5 registered clock driver, or RCD, business, along with traction in newer products. The company introduced complete chipsets for DDR5 9600 client and server memory modules during the quarter, including a DDR5 9600 RDIMM chipset built around its sixth-generation RCD and PMIC5030 power-management product.
The company is also pursuing new memory-module architectures, including MRDIMM and LPDDR5X SOCAMM2. Seraphin said these products are intended to address differing performance, capacity and power requirements as AI infrastructure becomes more varied.
Management expects MRDIMM’s contribution in the fourth quarter to be minimal, with a more material contribution expected in 2027 as CPU platforms ramp. Seraphin said Rambus is continuing to ship products for early customer system builds.
On LPDDR-based server modules, Seraphin said the company views SOCAMM as complementary to DDR-based server memory rather than a replacement. DDR is expected to remain dominant in systems requiring server-grade scale, capacity, reliability and serviceability, while LPDDR may be used where power efficiency is particularly important, he said.
AI and Silicon IP Demand
Rambus said AI workloads are increasing demand for memory capacity, bandwidth, power efficiency and secure connectivity. Seraphin said agentic AI applications are helping drive demand for CPU-based servers used for orchestration, data management and real-time execution.
In silicon IP, the company cited customer traction and design wins across hyperscalers, custom silicon companies and AI semiconductor developers. Rambus disclosed a design win with a tier-one U.S. hyperscaler for next-generation HBM in future AI chips. Seraphin clarified during the question-and-answer session that the win is an IP opportunity, rather than a product-chip design win, and follows the company’s licensing business model.
The company also introduced PCIe 7 switch IP supporting 128 gigatransfers per second. Seraphin said Rambus can recognize licensing revenue before its customers’ end products reach the market, because the company engages with customers early in their chip-development process.
Management reiterated its view that the silicon IP business can grow 10% to 15% annually. Seraphin said confidence in that target has increased as hyperscalers take a more direct role in defining their own system architectures and as customers seek advanced memory, interconnect and security IP.
Supply Conditions and Inventory
Rambus said it did not experience capacity constraints during the second quarter, although Seraphin said the company continues to see supply-chain tightness and lengthening lead times. He said Rambus has developed strong supplier relationships and has been able to meet market demand.
The company increased inventory by $16 million during the quarter. Management said the move was intended to support expected product ramps and provide customers with supply assurance as supply conditions remain tight. Seraphin said Rambus has not seen signs that customers are building excess inventory, but is itself holding strategic inventory for products expected to contribute to growth in the coming quarters.
Rambus ended the quarter with $825 million in cash equivalents and marketable securities, up $39 million from the first quarter. Operating cash flow was $61 million, capital expenditures were $12 million, and free cash flow was $49 million.
Third-Quarter Outlook
For the third quarter, Rambus forecast revenue of $210 million to $216 million. Product revenue is expected to be $110 million to $116 million, which would represent a 14% sequential increase at the midpoint. The company projected royalties revenue of $69 million to $75 million and contract and other revenue of $25 million to $31 million.
Rambus expects third-quarter non-GAAP earnings per share of $0.75 to $0.82, based on an assumed 16% tax rate and 110 million diluted shares outstanding.
Chief Financial Officer Sumeet Gagneja, who joined Rambus recently and made his first earnings-call appearance, said the company will now focus its results and guidance on an ASC 606 revenue basis. Rambus had previously disclosed licensing billings as an operating metric, but Gagneja said the difference between royalties revenue and licensing billings has become minimal.
Management said it expects the second half of 2026 to be stronger than the first half, while continuing to guide on a quarter-by-quarter basis because of platform-ramp timing and supply constraints. Seraphin said the company sees favorable demand conditions extending into 2027, including broader DDR5 adoption, more memory channels per CPU, a potential MRDIMM ramp and continued growth in companion-chip products.
About Rambus (NASDAQ:RMBS)
Rambus Inc is a technology licensing company specializing in semiconductor and system-level interface solutions. Founded in 1990 by Stanford University researchers Mike Farmwald and Mark Horowitz, Rambus established its headquarters in Sunnyvale, California. The company initially gained prominence by developing high-speed DRAM interface technology and securing a broad patent portfolio covering memory architecture, data signaling and power management innovations.
Today, Rambus licenses its proprietary intellectual property (IP) to semiconductor companies, original equipment manufacturers (OEMs) and system integrators worldwide.
